Traders have a preference for a trending market rather than one that is range-bound. Currently, there is uncertainty surrounding the next directional move for Bitcoin (BTC), causing traders to step to the sidelines. Research firm Santiment suggests that “fear and indecision” are the factors leading to a drop in Bitcoin’s on-chain activity, which has reached historic lows. However, this does not necessarily mean that Bitcoin will experience further declines.
Bitcoin’s consolidation phase is providing opportunities for investors to accumulate more Bitcoin. Japanese investment firm Metaplanet has made a “strategic shift” in its treasury management strategy and is now following a Bitcoin-only approach due to a sustained decline in the Japanese yen. Metaplanet recently purchased 117.7 Bitcoin at an average price of $65,000.
When a market consolidates near its lifetime high, it is generally seen as a positive sign as it indicates that traders are holding onto their positions in anticipation of the uptrend continuing. However, if the market fails to break through overhead resistance despite repeated attempts, traders may start to sell their positions, leading to a sharp pullback.
The question now is whether bulls will defend essential support levels in Bitcoin and select altcoins. To find out, let’s analyze the charts.
The S&P 500 Index has been steadily rising towards its all-time high, indicating strong demand from the bulls. The 20-day exponential moving average (EMA) is sloping up, and the relative strength index (RSI) is in positive territory, giving a slight advantage to the buyers. If the index surpasses the 5,265 level, it may continue its upward movement towards 5,500. However, the bears are unlikely to give up easily and will try to stall the upward move at 5,265, potentially leading to a period of range-bound trading between 5,265 and 4,950.
The U.S. Dollar Index (DXY) broke below its 20-day EMA on May 9, indicating aggressive selling by the bears. They will now try to push the price towards the 50-day simple moving average (SMA), which could act as strong support. If the price bounces off the 50-day SMA, the index may attempt to rise above the 20-day EMA and rally to 106.50. However, if the price continues to decline and breaks below the 50-day SMA, it would suggest that the bears are in control, and the index may drop to the support line, attracting buying interest from the bulls.
In the case of Bitcoin, the bulls are struggling to sustain the price above the 20-day EMA, indicating that the bears have the upper hand. The flat 20-day EMA and the RSI near the midpoint suggest that the market could remain range-bound for a few more days. If buyers can keep the price above the 20-day EMA, the BTC/USDT pair may rise to the 50-day SMA, which could act as a strong resistance. However, if the bulls manage to surpass this level, the pair may climb to $73,777. On the other hand, if the price turns down from the 50-day SMA, it would indicate bearish activity and the pair may slump to the critical support zone between $59,600 and $56,500.
Ether (ETH) is currently trading within a descending channel pattern, indicating that the bears are in control. The price is attempting to bounce off the $2,850 level, which is an important support level for the bulls. If this level breaks down, the ETH/USDT pair could continue its downtrend towards the channel’s support line. However, if the bulls want to make a comeback, they will need to drive the price above the resistance line. In that case, the pair may rise to $3,357 and later to $3,730.
BNB has been trading between the downtrend line and the moving averages, showing indecision between the bulls and the bears. If the price falls below the moving averages, it would give the bears a short-term advantage, potentially leading to a decline to $536 and later to the crucial support at $495. On the other hand, if the price breaks above the downtrend line, it would indicate that the bulls are in control. They will then aim to push the price above $635 and resume the uptrend.
Solana broke below the $140 support level on May 13 but failed to drop further to the pivotal support at $126. The flat 20-day EMA and the RSI near the midpoint do not provide a clear advantage to either the bulls or the bears. If the price turns up and rises above the 20-day EMA, it would suggest strong buying at lower levels and the pair may reach the stiff resistance at $162. Conversely, if the price turns down from the 20-day EMA and breaks below $137, it would indicate bearish activity, and the pair could descend to $126, where buying interest from the bulls is expected.
XRP has been trading below the 20-day EMA, but the bears have not been able to sink the price to the essential support at $0.46. The downsloping 20-day EMA and the RSI near 43 suggest that the bears have the upper hand. Any recovery attempt is likely to face selling at the 20-day EMA. If the price turns down from the 20-day EMA, the XRP/USDT pair may drop to $0.46. Buyers are expected to fiercely defend this level. On the other hand, if the price rebounds off $0.46 with strength and rises above the 20-day EMA, it would indicate that the pair may continue its range-bound action for some time.
Toncoin has been gradually moving higher towards the overhead resistance of $7.67, indicating demand from the bulls. If the bulls can hold their ground at this resistance level, it would enhance the prospects of an upside breakout, potentially leading the TON/USDT pair to rally towards $9. However, if the price sharply turns down from the overhead resistance, it would indicate that the bears are not willing to give up, and the pair could descend to the moving averages, which are likely to act as strong support.
Dogecoin has been consolidating between the 50-day SMA and the horizontal support at $0.12. Buyers are attempting to maintain the price above the 20-day EMA. If they succeed, the DOGE/USDT pair may rise to the 50-day SMA, which is an important level for the bears to defend. A rally above the 50-day SMA could open the doors for a further rally towards the overhead resistance zone between $0.21 and $0.23. On the other hand, a break and close below $0.12 would complete a bearish head-and-shoulders pattern, indicating a potential drop to the strong support at $0.08.
Cardano recently bounced off the support line, which is an important level for the bulls to defend. The downsloping 20-day EMA and the negative RSI suggest that the path of least resistance is to the downside. If the price breaks and stays below the support line, the next stop could be $0.40. Conversely, if the price continues to rise and breaks above the 20-day EMA, it would indicate that the bulls remain buyers on dips. The ADA/USDT pair may then rise to the 50-day SMA and eventually to $0.57.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.